Issue link: http://palletcentral.uberflip.com/i/1280561
22 PalletCentral • July-August 2020 palletcentral.com As happened with the Great Recession, all of the headwinds hardwoods have faced the last two years combined with the coronavirus pandemic are reducing U.S. hardwood manufacturing capacity, not just capacity utilization. Amid these challenges, consumption by domestic grade lumber markets slid 79 MMBF to 2.143 BBF in 2019. However, business disruptions resulting rom the coronavirus have caused grade usage to plummet in 2020. Hardwood Market Report projections antici- pate a total decline of 723 MMBF from last year. Importantly, the latest round of disruptions to grade lumber business was only a part of the pandemic problem for hardwoods; demand from industrial markets was suddenly interrupted. Given all the impacts this pandemic has had on U.S. hardwood trade, one of the most damaging effects has been decreased raw material demand by the wood pallet and container industry. In 2019, prior to the pandemic, rising demand from the pallet and container industry lifted total industrial market consumption of hardwood by 150 MMBF over the previous year. However, industrial markets are expected to consume 1.101 BBF less hardwood this year than last, with the pallet and container sector accounting for most of the decrease (-953 MMBF). The Production Response The broad effect from the downturn in exports, increased competition from other materials, and the pandemic is that less hardwood lumber is needed. Since supply inevitably adjusts to demand, less lumber is being produced. There is an undeniable connection that makes the wood pallet and container industry critical to hardwood lumber production. The ability or inability 123rf.com